McDonald's China Scandal May Jolt Food Safety Laws

by WSJ Live
3:47 mins

McDonald's China Scandal May Jolt Food Safety Laws

by WSJ Live
3:47 mins

In China, Big Macs and Chicken McNuggets are back on the menu after a supplier was accused of selling expired meat. Six people have been arrested. As the WSJ reports (http://online.wsj.com/articles/mcdonalds-overhauls-food-safety-strategy-in-china-1409643383) McDonald's Corp. is overhauling its food-safety strategy in China after problems with a supplier hit the fast-food chain's image and eroded its sales in the country. The Oak Brook, Ill.-based company said in a statement that it will review surveillance video from meat-production sites in China and boost audits of suppliers. More than half of the added audits will be unannounced and conducted jointly by third-party auditors and McDonald's management teams, the statement said. The others will be conducted by suppliers' corporate auditors, it added.
Other steps include the creation of anonymous hotlines for suppliers and their employees to report unethical or noncompliant practices and the dispatching of quality-control specialists to all of McDonald's meat-production facilities in China, the statement said. The company also said it created a new head of national food safety position in China that will report directly to the chief executive officer. The company is appointing Cindy Jiang —currently senior director of McDonald's global food safety, quality and nutrition—as interim head.
The moves come as McDonald's looks to restore operations in China, where it has more than 2,000 stores, following problems that began in late July with meat supplier Shanghai Husi Food Co., owned by U.S.-based OSI Group LLC.
Authorities accused the Shanghai plant of intentionally selling expired meat to restaurant companies after a television station ran a report alleging the practice. They also launched an investigation into the company, which has yet to be completed, according to China's food and drug regulators. On Friday, six employees of the Shanghai plant were arrested for "selling substandard products."
Sheldon Lavin, chief executive and owner of OSI, apologized to Chinese consumers in July for the problems and said he would focus on overhauling the company's China business. McDonald's also said in its statement that it is evaluating California-based Golden State Foods Corp. as a potential new supplier in China. The supplier's China division is taking over management of OSI's produce plant in the southern Chinese city of Guangzhou, OSI announced Monday.
A successful evaluation of the Guangzhou plant's new management would reignite a partnership with OSI that has been at a standstill since the July report.
McDonald's said last week it was reconsidering its relationship with OSI, its largest supplier, from which it suspended orders in China after the expired-meat allegations. For more, go to: http://online.wsj.com/articles/mcdonalds-overhauls-food-safety-strategy-in-china-1409643383.